Pharmacies lose appeal on Medi-Cal drug reimbursement rates

Updated 5:17 pm, Wednesday, June 11, 2014

The state Supreme Court on Wednesday rejected pharmacies' appeal of a ruling that allows healthcare plans serving low-income patients in California to ignore what it costs drugstores to obtain prescription drugs when setting Medi-Cal reimbursement rates.

Pharmacies in several Northern California counties, including Marin, Sonoma and Solano, challenged Medi-Cal rates set by their managed-care network, Partnership HealthPlan of California, under authority granted by the state and federal governments. Pharmacists said they were losing money because the plan's rates were less than their costs of buying the drugs.

In a 3-0 ruling in February, the First District Court of Appeal in San Francisco said federal law requires rates to be high enough to provide patients with "quality care" and "adequate" access to medications. But the court said the law doesn't require states to take pharmacies' costs into account when determining how much to reimburse them for the drugs they provide.

The panel relied on a May 2013 decision by the Ninth U.S. Circuit Court of Appeals in San Francisco that said state regulators can ensure access and quality in various ways and do not have to consider providers' costs.

Pharmacy owners appealed to the state's high court, saying the rate system has driven some druggists out of business and would discourage others from serving Medi-Cal patients. But the court unanimously denied review Wednesday and left the appellate decision intact as a binding precedent for trial courts statewide.

Latest from the SFGATE homepage:

Click below for the top news from around the Bay Area and beyond. Sign up for our newsletters to be the first to learn about breaking news and more. Go to 'Sign In' and 'Manage Profile' at the top of the page.